Fed Leaves Interest Rates Unchanged, Saying Economy is Expanding at Solid Pace

A divided Federal Reserve left interest rates unchanged on Wednesday.

“Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, on average, and the unemployment rate has been little changed in recent months. Inflation is elevated, in part reflecting the recent increase in global energy prices,” the Fed said in a statement.

The central bank has maintained its benchmark interest rate target at a range of 3.5 percent to 3.75 percent since its last cut in December.

The Fed noted that the economy faces risks of higher inflation and slower growth due to the war with Iran. By law, the Fed’s policy seeks to achieve maximum employment and price stability, which the Fed considers consistent with a two percent rate of inflation.

“Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook. The